If Skype was disruptive to telcos, then Cubic Telecom is their nightmare (and good for you)

A few weeks prior to my scheduled departure for Dublin, Ireland where I ran the most recent Mashup Camp, I started handing out the phone numbers of my hotel and traveling companions to people who might want to reach me while I was over there. For cell phone usage, I'm a Verizon Wireless customer and, like Sprint customers, Verizon Wireless' network is based on a radio technology (CDMA) that doesn't work in Europe.

A few weeks prior to my scheduled departure for Dublin, Ireland where I ran the most recent Mashup Camp, I started handing out the phone numbers of my hotel and traveling companions to people who might want to reach me while I was over there. For cell phone usage, I'm a Verizon Wireless customer and, like Sprint customers, Verizon Wireless' network is based on a radio technology (CDMA) that doesn't work in Europe. In other words, the radio technology in my phone is incompatible with the radio technology (GSM) that blankets all of Europe. My phone doesn't work there.

<sidebar>Research in Motion's BlackBerry 8830 World Edition is sold by both Verizon Wireless and Sprint and has three two radios in it: GSM and CDMA, and WiFi. So, it is the one phone from the two carriers that can roam to Europe provided you have the necessary roaming agreements in place. Hold that thought.</sidebar>

At some point over the years, I could have switched to one of the carriers (ie: AT&T or T-Mobile) whose phones can roam to Europe. But my travels to Europe were too infrequent to warrant the change especially given how AT&T and T-Mobile have almost no signal in my house while Verizon Wireless' service penetrates almost every nook and cranny of it.

I've digressed.

After sending a variety of numbers to a variety of people who might have needed to reach me while in Europe, LouderVoice.com CEO Conor O'Neill wrote back and asked if I had tried Cubic Telecom's MaxRoam service. He subsequently put me in touch with the company's CEO Pat Phelan who in turn made sure a MaxRoam-enabled phone was waiting for me at my hotel when I arrived in Dublin.

At the very least, MaxRoam is a big money-saving SIM card
Phelan's biggest problem when it comes to plowing MaxRoam's way to success will be in communicating what it does. At first, MaxRoam comes across as a service that can save you a lot of money on roaming fees if you're one of those international travelers that spends a lot of time on your cell phone where ever your travels take you around the world. For example, according to the roaming calculator on T-Mobile's Web site, if I'm an American in Europe with a T-Mobile-provisioned phone, the per minute fee when placing a call in Ireland or the UK is 99 cents per minute. The same 99 cents per "Ireland minute" goes for AT&T according to its table of roaming charges per country.

International travelers are so sensitive to roaming fees that they will often acquire a temporary SIM card in whatever country they are traveling to and swap that temporary card into the place of the SIM card that came with their phone from their native carrier (ie: T-Mobile or AT&T). SIM cards for those not familiar with GSM-based carriers are small cards that are inserted into the phone. Once a SIM card is inserted into a phone, the phone takes on the "personality" of the SIM card. For example, whatever phone number and carrier is associated with that SIM card becomes the phone's phone number and the phone's native service provider.

To save money, an American international traveler traveling to Ireland might remove his/her T-Mobile or AT&T card and replace it with a Vodaphone SIM card (Vodaphone operates a GSM network in Ireland) that's associated with an Ireland-based phone number. As a result, any calls s/he makes or receives to or from other Ireland-based numbers are charged according to Vodaphone's local service charge as opposed to T-Mobile's or AT&T's international roaming charges. Depending on how often one travels and how much they use their phone while traveling, the savings can be substantial.

At the very least, Cubic Telecom's MaxRoam offers one of those SIMs that international travelers can buy to dramatically reduce the cost of roaming internationally. The cost to get started is basically 30 Euros, 5 of which are credited as a prepay to your account (for making calls). Through the MaxRoam.com Web site, you can always "top up" your account (load up your prepayment "bank").

An unlocked phone (one that, unlike Apple's iPhone, will take any SIM card) is required and according to the calculator found on the MaxRoam Web site, an incoming call from the USA to a MaxRoam-based phone (one with the MaxRoam SIM in it) in Ireland would cost 24 cents per minute (a savings of 75 percent over what AT&T and T-Mobile charge per minute). An outgoing call from Ireland to the USA would cost 36 cents per minute (roughly a 64 percent savings over AT&T/T-Mobile) and a call to a local number in Ireland would be 31 cents per minute.

Kind of like Skype
To see MaxRoam as just another one of those SIM cards that you put in your phone to save money when roaming internationally would be a huge mistake. If that's all you want it for, then it is definitely that. But it's also much more.

After having used MaxRoam for a bit now, I see a lot of similarities to Skype. Perhaps the easiest similarity to grok is the way, through Skype's Web site, you can acquire phone numbers (known as a "Skype-In" numbers) that when dialed, will ring through to your Skype client (could be software running on your PC, PDA, or smartphone or hardware like IPEVO's Solo).

Via Skype's online service, not only can you aquire and load with prepaid credit new Skype-In phone numbers, you can pick the home country of those phone numbers even if they're different from the country you live in. For example, if I wanted, I could acquire an Ireland-based Skype-In number, the primary advantage of which accrues to people in Ireland who want to call me without incurring international long distance charges. To you, as a Skype user, you reap the huge benefits of the same dirt cheap telephony that has always been the domain of Skype since the service is primarily a Voice-over-IP (VoIP)-based service.

Like Skype, Cubic Telecom's MaxRoam offers you the same ability to login into your account on the MaxRoam Web site, acquire a number that's local to any one of 28 supported countries, and have that number ring directly through to your "client." Number acquisition appears to vary in cost between 1 and 2 Euros per month. But, whereas that "client" in the Skype world must invariably have access to the Internet (in other words, its a Voice over IP call), in MaxRoam's case, the client is an actual phone that connects to a cellular network, but that can optionally also connect to and use the Internet (provided a WiFi signal is accessible, see below for more on that).

Today, as Cubic Telecom brings its service online, the phone it is providing to customers at a cost of 99 Euros is Pirelli's DP-L10. Customers will have their choice of two user interfaces -- the one that normally comes with the DP-L10 and Windows Mobile 6. Included in the phone is a Cubic Telecom client that can make calls over the Internet (the user decides if calls should be made via WiFi or over the cellular network). By next year, the company plans to have similar client software for all of Nokia's S60-based devices (eg: the N95). Via its Web site, the company will also offer a Windows-based "softphone" that Cubic Telecom customers will be able to download and install on their PCs. If those customers have a DP-L10 sitting next to their PC when an incoming call comes in, both the softphone and the physical phone can be optionally set to ring simultaneously (via a special burst ring mode, discussed below).

Like Skype, when sending or receiving calls over WiFi (as opposed to GSM), Cubic Telecom's customers will experience significant savings. Inbound calls are free. Outbound calls are charged at 1 cent per minute.

In a screen gallery that I've prepared to go along with this blog post, you can see how (a) users of the MaxRoam service would access their online accounts to acquire new numbers from different countries and do other things like trigger forwarding and (b) how the Pirelli DP-L10 can be programmed to work with a WiFi hotspot and then optionally make a phone call over that WiFi connection.

The MaxRoam SIM will work with other phones (for example, any unlocked GSM phone) but the WiFi calling feature will only be available to supported phones since there's no prevailing standard or ubiquitously available software for placing plain old telephone system (POTS) calls over IP networks.

So, in some respects, Skype and MaxRoam are the same. In others, they are a bit different. Both Skype and MaxRoam can route calls between VoIP and POTS. Users of both can associate numbers that are local to other countries with their accounts (and in MaxRoam's case, those numbers can be associated with the phone's GSM connection or its WiFi connection). But whereas Skype is natively VoIP, MaxRoam can natively be one, the other, or both simultaneously. It's up to the user.

And it's the "simultaneous" point that has me also likening another aspect of MaxRoam's service to Jangl (see my write-up of Jangl, including a podcast with its founder) and GrandCentral (recently acquired by Google). Among the many things these services do (other similar services listed here), their biggest claim to fame is how they enable you to give out different phone numbers to different people in a way that all of those phone numbers ring through to one physical phone. Or, in Cubic Telecom's case, using what CEO Phelan refers to as a "burst ring" or "broadcast" mode, to as many as five phone numbers simultaneously (none of which have to be Cubic Telecom-provisioned numbers).

In a social context, if you just met someone in a bar, you might create and give them a Jangl-provisioned phone number and, in the event s/he turns out to be a phone stalker (calling you 50 times a day), you can simply turn that number off. In a business context, when some business asks you for your phone number and telemarketers subsequently bombard that number with calls, you can turn them off too. Since none of the people you give these temporary numbers to know your real phone number, once you turn them off, they have no way of reaching you again.

With MaxRoam, you essentially have the exact same functionality. According to Cubic Telecom's Phelan, a MaxRoam account can have as many as 50 different incoming numbers associated with it at any given time. The numbers can be from any one of the 28 supported countries and each is assigned to only one of the phone's two radios. For example, you may have two separate numbers that you give out to American callers: one is a USA-based number for reaching you over the cellular network, the other is a USA-based number for reaching you over WiFi. Both can "roll" to the same voice mail system in case you can't pick up, voice mail can be auto-forwarded as a WAV file to an e-mail account, and forwarding the numbers to other numbers is free. So, if you envision not being able to receive calls over your WiFi connection, you can use the Web site to enable forwarding of inbound calls targeting the WiFi number to your cellular number and MaxRoam will take care of the routing behind the scenes.

One really interesting feature of the burst mode is how you, as the recipient, can control how much the inbound call costs you. For example, if four of the numbers you've routed your calls to are your MaxRoam numbers for the UK, Ireland, the USA, and France and one is one of your WiFi numbers, the user interface on the DP-L10 will offer you the choice of picking the call up on any of the numbers that the call is "bursting" through to. If for example, the call is coming from Ireland and one of the numbers it is ringing through to is your Ireland-based number, you might want to pick that call up on the Ireland-based number to minimize the roaming charges even further. Or, if your phone is connected to to a hotspot and you've programmed (via the Web site) one of the burst numbers to be one of your WiFi numbers, you'd obviously pick up the call on that number since WiFi is always going to be your least expensive option.

What about data?
OK, so your sold on how Cubic Telecom has revolutionized voice. But what about data? The Web is full of horror stories -- bills involving thousands of dollars -- where American travelers used their handsets in Europe to access the Web and e-mail only to find later how data roaming can really drive their bills through the roof.

When discussing handsets, data primarily comes in two flavors: SMS and everything else (Web, email, etc.). Cubic Telecom's service supports SMS. According to Phelan, SMS only works with the phone's primary number (in other words, not one of the other 49 numbers that you can assign to the phone after) and receiving SMS messages is free. Sending SMS messages involves a charge of .30 Euros per SMS and there's no additional charge associated with sending an SMS to a number that's foreign to whatever your primary number is.

As for the Web, e-mail, and other data, Cubic Telecom doesn't yet support roaming. But, according to Phelan, once Cubic Telecom achieves its MVNO status (which it expects to do by April 2008), it will be able to offer the same sort of steep discounts it currently offers for voice roaming. Phelan anticipates that the savings will be in the territory of 70 percent saying that the charges will be roughly 1 Euro per MB for Europeans roaming in Europe.

How well it works
It's probably hard to read what I've just described and not think that Cubic Telecom and services like it (for example, Truphone -- a UK-based company that does the same thing, but strictly on Nokia S60-based phones) are the disruptive forces that the telecommunications industry has been living in fear of. For example, in India where the state-run carrier BNSL receives lucrative termination fees from American telcos every time US-based Indian ex-patriots call home, a service like MaxRoam would wipe out those termination fees and the huge profits that BNSL reaps as a result.

For this reason, you can understand why countries with state run telcos (another example is in the Mid-East where telcos are controlled by royal families) are loathe to offer local phone numbers for resale to companies like Cubic Telecom. In fact, it's the reason that Cubic Telecom can only get local numbers in 28 countries (this doesn't prevent you from roaming in the 160 that have GSM networks. It just might not be that cheap in some cases). The remaining 130 or so countries are like India and the UAE: they don't issue numbers for resale to outfits like Cubic Telecom.

Even so, Cubic Telecom is the sort of force that strikes fear in the eyes of the traditional telcos, so long as it works.

Today, right now, Cubic Telecom is rough on the edges. The process of making a call over the GSM network for example, is clunky. For starters, when I placed such calls, the service would disconnect me and then, seconds later, the phone would ring and I'd hear a voice that said "connecting your call." This actually wasn't a major problem. But, on several occasions, when I decided I didn't want to place that call anymore (for example, the person I was calling suddenly showed up right in front of me), pressing the END button on the phone wasn't enough to end the network's attempt to complete the call. The network still put the call through and called my phone back to let me know that it had completed the call. This produced some awkward moments while I was in Ireland. But those around me were tolerant of the problems knowing that I was testing something new.

Another problem is that caller ID didn't work for me so I couldn't really tell who was calling me.

Both problems, according to Phelan, are related to the fact that Cubic Telecom has not yet achieved the status of MNO or Mobile Network Operator. Once Cubic Telecom becomes an MNO (in its case, it'll be a MVNO or Mobile Virtual Network Operator), Phelan says that three important things affecting the attraction to Cubic Telecom's services will happen. First, the call back and caller ID problems will go away. Second, the roaming fees will come down even further, producing even more dramatic savings for Cubic Telecom's customers. And finally (this is more like 2B), Europeans that use the Cubic Telecom service when roaming in the US will experience such unprecedented savings that Phelan is relatively certain he will have to fight off customers given how many Europeans travel to the US and the outrageous roaming fees they must currently pay while they're there, making calls.

WebOps still in development
For all intents and purposes, Cubic Telecom's existing Web site is under construction and lacks many of the features that the company plans to make available to its customers. Phelan gave me behind the firewall access to most of the functionality so that I could confirm it's there. But it's clearly not ready for the public's consumption (and Phelan has openly said so many times, so he's not hiding anything).

For example, today, there's no single user interface for acquiring additional numbers whether they're WiFi-based (what Phelan calls "the Cubic Network") or SIM-based. Additionally, there's no way to set up the burst mode ring feature that Phelan said is available. In fact, to the extent that I wanted to test a bunch of the features, Phelan had to get his operations people to manually set those services up for me. This isn't to say that the Web site won't be operational with these features at some point in the near future (they are working on it right now). But, I'd be misrepresenting these features that I've discussed so enthusiastically if I didn't also point out that the Web-based user interface for configuring some of them wasn't available to Cubic Telecom's customers yet.

Residential/Hotel WiFi problems
If you've ever been to a hotel that has WiFi (or other public hotspots like T-Mobile's for that matter) and noticed how you need to access a Web page through your browser in order to gain access to the WiFi network, then you also know that there's often more to accessing a secure hotspot than just entering some WEP keys (which the Pirelli phone can be configured to do). When, for example, I was in my hotel's lobby in Dublin and I tried to make a phone call over the WiFi network that was floating around me, I was unable to associate the phone with that hotspot because I didn't have the sort of easy access to the Web-based WiFi registration pages that a PC would.

Not that this is a major problem. In cases like these, you can always default to the SIM-based GSM network for making and receiving calls. It's just that the far lesser-expensive WiFi option (the one that will deplete your prepaid account at a far slower rate) may not be available to you. Phelan is aware of this issue and to make usage of Cubic Telecom's phones much easier in those hotspots, he's striking deals with major hotspot providers (eg: the ones that run hotspots in hotels and airports) to ease access to secured hotspots without too much user interference.

Access in secure hotspots isn't the only challenge that Cubic Telecom will have to overcome. After returning to the States, I was eager to try the phone out at my home. So far, I've been able to make outbound calls. However, I've not been able to receive any calls. After a great many e-mail exchanges with Cubic Telecom's CTO Gary Knapper, he and I think we've got the problem isolated to the configuration of my router's firewall. For Cubic Telecom, chances are this problem will not be unique to me. In the name of security, most residential firewalls block huge swaths of ports by default -- ranges that may in fact include the ports that must be open in order for a Cubic Telecom phone to receive a phone call through its WiFi connection to the Internet. As of the time I published this story, Knapper and I were still working on the problem.

Overcoming this particular issue may be a bit more challenging for Cubic Telecom than managing the aforementioned secure hotspot access problem since it will have to somehow help customers (all of whom have different firewalls) to work through any potential firewall issues. This could entail everything from support of Universal Plug N Play to a series of FAQs on Cubic Telecom's Web site that show step-by-step walkthrus on how to reconfigure some of the more popular firewalls (eg: Linksys, NetGear, etc.).

Conclusion
Most services go through a variety of trials and tribulations before they officially launch and Cubic Telecom's range of services are no different. The bigger question is, based on what's operational now, has Cubic Telecom demonstrated something disruptive and revolutionary that's going to turn the existing telephony regime on its ear. If you ask me, the answer is an unequivocal yes. As said before, even if you're only interested in the roaming, forwarding, and multi-number capabilities associated with the SIM-based MaxRoam service, you really can't go wrong with what the company offers so far. And, if what Cubic Telecom is demonstrating so far is any harbinger of how disruptive to the status quo its services will really be, then the status quo is in trouble. Very serious trouble. In fact, if you're one of the folks at eBay who runs Skype, right about now you should be looking at this and saying "this is what we should have done more than a year ago."

Predictions
For the most part, Cubic Telecom is flying below the radar right now (although it got some good coverage during a TechCrunch 40 event earlier this fall). One question that comes to mind is how many other similar companies have started up and are operating in stealth mode right now. Cubic Telecom can't be the only one (as mentioned earlier, there's the UK-based TruPhone but it's not a tit-for-tat competitor). On the other hand, it appears to have some degree of first mover advantage that certain companies (giants) that should have been the ones to come up with Skype but didn't, won't want to be embarrassed by again. While it may be flying below the radar, it's undoubtedly on the radars that count (especially after being featured at the TechCrunch 40 event). In other words, keep Cubic Telecom on your radar. If not for the advantages it can offer to you, then just as an industry watcher. You'll be hearing about it again (and I'll be continuing my testing).

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